Bengaluru-based B2B e-commerce startup Nuoaura is targeting revenues of Rs 9 crore this fiscal.
Nuoaura—pronounced ‘new aura’—refers to new energy. When Sharad Jaiprakash (35) started up with B2B e-commerce for office supplies, this name fitted perfectly. After all, Nuoaura is all about the new dimensions of doing business.
Getting office supplies from multiple vendors and making multiple contracts is a pain for businesses, whether corporate or SMEs. Nuoaura is a single-window fulfilment platform for businesses to source everything they need on a daily basis, including stationery, gifts, awards, T-shirts, housekeeping, laptops, ACs, even furniture. Their USP is multi-location delivery and digital assistance including a MIS dashboard for clients.
Registered in October 2015, Nuoaura began operations in January 2016. In a year and a half, Nuoaura has earned more than 50 clients including Tata Group, Tesco, Amazon India, Essar Group, Ujjivan Bank, and Kamineni Hospitals.
Sharad claims that with a quarterly revenue growth of 52 percent, Nuoaura broke even last October. The founder-CEO tells YourStory:
“In the last 17 months, our sales have given us Rs 5.4 crore in revenue. Today, we are profitable and expanding to more cities. We are expecting 125 percent growth and Rs 9.5 crore in revenue this fiscal year.”
Trial and error
Sharad is a BBA and has an executive master’s degree from IIM-C. Although he worked at GE in supply chain and later Wipro for about a decade, Sharad had always wanted to be an entrepreneur.
In 2009, he took the entrepreneurial plunge with Smiling Shoes, a shoe laundry startup, when he was living in Hyderabad. But it shut down in five months due to lack of capital.
Sharad then decided to go back to distribution, where he already had customers. “For the first few months, I was just buying and selling office supplies. Then I started looking at distribution as a huge opportunity.”
That’s how Arkarise happened. (Nuoaura is a domain name under the umbrella brand of Arkarise Business Solutions.)
The company, which provided telecom infrastructure solutions, ventured into Singapore too. It worked with global companies which were trying to expand their footprint in emerging markets—right from market launch to setting up distribution channels, promoting the product to customers, and managing the after-sales services. (All these services were in B2B verticals: telecom, IT, etc.) They are now present in the US too.
To grow globally, manufacturers look for partners abroad. But these distributors/partners sell only what is already fast moving. Sharad wanted to bridge this gap between the product companies and distributors.
“Arkarise partners with brands in many countries for distribution. In five years of engagement with global brands in different countries, that business is now worth $2 million,” Sharad says.
The next step was Nuoaura. Arkarise provided Nuoaura its initial investment of Rs 30 lakh. Their research found that, in Q4 2015, the market for office supplies in India was worth $25 billion. Annually growing at 17–18 percent, it will be about $50 billion by 2019.
Out of this, only 0.5 percent companies adopted internet and e-commerce to source office suppliers in 2015–16. These customers are growing 150 percent annually—they use or intend to use digital platforms to source office supplies, which makes the market worth $7–8 billion.
Since the opportunity is so huge, Sharad decided to build a business model with digital tools for customers to manage sourcing. If the customer has multiple locations, sourcing will be a problem in terms of pricing, availability, etc. Sharad’s aim was not just automating the sourcing but also keeping the entire process under one online platform. He wanted to keep the stakeholders connected and manage all activity with automation.
With Nuoaura, a company can register itself and make requests online. Every client gets a relationship manager who takes care of services across verticals to coordinate on a daily basis.
In B2B commerce, there is no cash burn for customer acquisition. Marketing is practically a one-to-one exercise. Since Nuoaura does not manufacture, it has to get the sourcing channels right—either from tier-1 distributors or directly from manufacturers.
“It has been a major task to build relationships with brands and their tier-1 partners in different cities. (Nuoaura already caters to about 90 cities including tier-3 cities like Akola and Shimoga, among others.) In our multi-location delivery service, the prices you agree upon in Bengaluru is also done in Kolkata, or Nagpur, or Cochin,” Sharad explains.
Although Nuoaura did not start with an inventory-based model, it now follows a hybrid model with warehouses being built for customers who have already committed business on a monthly basis.
Bridging a gap
The stationery and office supplies market in India is 95 percent driven by unorganised, traditional sourcing methods. But 80 percent of businesses use the internet to search for vendors.
However, according to Sharad, Nuoaura needs more visibility. “Today, stationery brands like JK Paper and Camlin are directly working with us. They know what kind of deals we are working on. We need such relationships across different verticals. For instance, Featherlite is not giving us exclusive pricings and products, although we do supply their products. They also need to gain confidence and clarity on what we bring to them. To have sync with their business is critical, although we, as a company, might have set parameters to work with,” Sharad adds.
Currently, the Indian office supplies market size is $35 billion. Increasing demand to automate sourcing activities has resulted in more players coming up in the office supplies space in the online market in India—StationeryShop, Offimart, and OfficeYes among them. (Early bird Zoffio was sold off to a Chinese firm last year).
With zero tolerance on fake products, Nuoaura has an advantage in a market which has no clear leader yet. Being profitable definitely gives it a push as funding is no cause of concern.
Nuoaura already has 10 categories: office stationery, consumables, IT, gifts, educational supplies, electrical supplies, on-demand services (like business card printing), pantry, etc. and will add six more categories this fiscal year. The team of 21 has offices in Hyderabad, Bengaluru, and Chennai, and will have a Mumbai one soon.
For Sharad, the customer is the biggest mentor and VC. “I learnt everything from my customers. I am creating new businesses from the customers. Word of mouth is huge in this industry,” he says.